Day-1, SAP MM

IBM Global Business Services

Project - Synergy

SAP Materials Management (MM) SAP MM Training

DAY 1 © Copyright IBM Corporation 2011 | September 2011 | Overview workshop |

© Copyright IBM Corporation 2011


Introduction  At

the end of the course, participants will be able to:



Explain SAP Materials Management (MM) functionality and how the module integrates with other modules



Describe the MM organization structure, master data, and common business transactions



Perform basic MM business transactions



Perform basic MM configuration

| September 2011 | Overview workshop |



Introduction





Ground Rules 

Participate - Ask questions!



Learn From Everyone’s Comments



Please Turn Off Cellular Phones



Honour Time Schedule



Relax and Have Fun!

Introduce Yourself 

Name, Operating Group, Location



Your SAP MM Training Objective/s




Introduction  Reference Days

Sub module

Materials

Date

Timings

Topics covered Introduction to SAP Logistics Org Structure

10:30 am to 1:00 pm

SAP

Day 1

Familiarisation Guide  SAP Navigation Assistance 26/9/2010

MM

2:00 pm to 4:30 pm

10:30 am to 1:00 pm Day 2

27/9/2011

MM 2:00 pm to 4:30 pm

SAP

Materials Management Master data-Material Master Materials Management Master data( Contd.)-Material Master, Vendor Master ,Purchasing Info Record,Source List, Purchasing Pricing Condition Master Procurement Cycles in SAP Purchase requisition Request for Quotation,Quotation Maintenance,Quotation comparison Scheduling agreement-Contracts, Source determination

Quick Reference Guide  Provides transaction codes and description 10:30 am to 1:00 pm

Day 3

28/9/2010

SAP

MM

2:00 pm to 4:30 pm

Table Structure Overview

10:30 am to 1:00 pm

Day 4

29/9/2010

MM 2:00 pm to 4:30 pm

Day 5

30/9/2010

MM 10:30 am to 5:00 pm

Standard Purchase order creation and maintenanceDomestic and Import procurement cycles Internal and external purchasing document approval process Automatic price determination Brief overview on Automatic account determination in SAP Procurement of external services Goods receipt Goods issue Managing internal goods movement:Company to company,Plant to Plant,Sloc to Sloc ,Material to Material. Overview on reverse logistics processes in SAP:Return to vendor Physical stock verification process Logistics Invoice Verification:Park and Post of invoice,Invoice block,Release of blocked invoice Special procurement Process:Vendor Consignment,Subcontracting,Procurement of Capital item(Assets),Procurement of consumables goods




Basic Procurement Philosophy 

Introduction To Procurement Definition The process of obtaining services, supplies, and equipment from a vendor is called Procurement. The procurement department or the purchase department within an organization normally manages the majority of purchasing. Exceptions may lie in large industrial complexes where procurement may also be handled by engineering, or third party outsourced companies.





Introduction to Procurement (…Cntd) For organizations Procurement is the acquisition of goods or services at the best possible price, in the right quantity, at the right time, in the right place. The complexity of procurement is trying to “get the balance right”, for example: 

Organizations try to keep inventory levels at a minimum due to the costs associated with high levels of inventory, but at the same time it is very costly to stop production due to shortages in raw materials for example.



Getting the lowest price for a product or service is always important, but the balance between product availability, quality, and vendor relations can be more important.





The Procurement Lifecycle In most modern organizations the Procurement lifecycle has the following steps: 1. Information Gathering: If the potential customer does not already have an established relationship with sales/ marketing functions of suppliers of needed products and services, it is necessary to search for suppliers who can satisfy the requirements.

2. Supplier Contact: When one or more suitable suppliers have been identified, Requests for Quotes (RFQ), Requests for Proposals (RFP), Requests for Information (RFI) or Requests for Bids (RFB) may be advertised, or direct contact may be made with the suppliers.

3. Background Review: References for product/service quality are consulted, and any requirements for followup services including installation, maintenance, and warranty are investigated. Samples of the products or services being considered may be examined, or trials undertaken.





The Procurement Lifecycle (…Cntd) 4. Negotiation: Negotiations are undertaken, and price, availability, and customisation possibilities are established. Delivery schedules are negotiated, and a contract to acquire the products or services is completed. The contract is a mutually binding legal document.

5. Fulfilment: Supplier preparation, shipment, delivery, and payment for the products or services are completed, based on contract terms. Installation and training may also be included.

6. Consumption, Maintenance and Disposal: During this phase the company evaluates the performance of the products or services and any accompanying service support, as they are consumed.





The Procurement Lifecycle (…Cntd) 7. Renewal: When the products or services have been consumed and/or disposed of, the contract expires, or the product or service is to be re-ordered, company experience with the products or services is reviewed. If the products or services are to be re-ordered, the company determines whether to consider other suppliers or to continue with the same supplier.





Basic Procurement Activities Determination of Requirement

What Materials or Services are required?

Requisition

The form or electronic transmission used to inform the purchasing department that purchased items or services are needed for a business purpose

Purchase Order

When the requisition is approved it becomes a Purchase Order. A PO typically includes item, quantity, price, discounts, vendor information, and ship-to information

Goods Receipt / Invoice Received

Invoice Verification / Vendor Payment

The material is received. Condition and quality are verified / The invoice is received from the vendor.

Reconciliation of the invoice and the purchase order is accomplished /The Vendor is paid





Direct Vs. Indirect Procurement Based on the consumption purposes of the acquired goods and services, procurement activities are often split into two distinct categories. The first category being direct, production-related procurement and the second being indirect, non-production-related procurement. 

Direct procurement occurs in manufacturing settings only. It encompasses all items that are part of finished products, such as raw material, components and parts. Direct procurement, which is the focus in supply chain management, directly affects the production process of manufacturing firms.



Indirect procurement activities concern “operating resources” that a company purchases to enable its operations. It comprises a wide variety of goods and services, from standardised low value items like office supplies and machine lubricants to complex and costly products and services like heavy equipment and consulting services.

Note: Terms Direct/Indirect procurement are not always used as cited above. However, the above is an industry standard.




Procurement in IT Systems 

General cycle of activities: Payment

Determination of requirement

Invoice Verification

Goods Receipt

Procurement

PO Monitoring


Selection of vendors from the vendor database

PO processing




Recapping General cycle of activities: 1. Determination of Requirements Materials requirements are either identified by users or automatically by the IT system of the organization & passed on to the Purchasing department via Purchase requisitions.

2. Source Determination The IT System helps you identify potential sources of supply based on old orders and existing longer-term agreements with the vendor. This speeds the process of creating requests for quotation (RFQs), which can be sent to vendors.

3. Vendor Selection and Comparison of Quotations After receiving the Quotations from the invited vendors, the purchasing department compares them and chooses the most appropriate vendor to complete the order.

4. Purchase Order Processing The Purchasing system takes up input data from the requisition and the quotation to help the user create a purchase order. As with purchase requisitions, the user can generate POs or have the system generate them automatically. | September 2011 | Overview workshop |




Recapping General cycle of activities: (…Cntd) 5.

Purchase Order Monitoring The buyer (or Purchasing Officer) can check the status of the PO i.e. if the goods or invoices have been received. Generally Procurement IT systems can also be configured to automatically check PO progress and to issue reminders or expediters at predefined intervals.

6.

Goods Receipt Goods receiving personnel (normally warehouse personnel) can confirm the receipt of goods simply by entering the PO number into the system. By specifying permissible tolerances, buyers can limit over- and under deliveries of ordered goods.

7.

Invoice Verification Vendor invoices are checked for accuracy of prices and contents. Buyers can also specify permissible value tolerances for invoices.

8.

Payment Processing Based on the invoice verification, the Accounts Dept / Accounts Payable normally deals with vendor payments.




Procurement in IT Systems  Types

of Procurement



Procurement for Stock vs. Consumption



External vs. Internal Procurement





Types of Procurement Procurement for Stock vs. Consumption Procurement for Stock A stock material is a material that is kept in stock. These materials are kept in stock once received from the vendor. The stock of this material keeps on increasing or decreasing based on amount of the quantity received or issued. To order a material for stock, the material ‘must’ have a master record in the system.

Procurement for Direct Consumption When procurement is for direct consumption, the user must specify the consumption purpose. By entering an account assignment (for example, a cost center). To order a material for consumption, the material ‘may’ have a master record in the system.





Types of Procurement Procurement for Stock vs. Consumption (…Cntd) Procurement for Stock With Mat.Master Record

Account Assignment

Automatic Acc.Assgt Data from Mat. Master

Stock Account


Procurement for Consumption

With Mat.Master Record

Without Mat. Master Record

Enter Acc. Ass. Category

Manual Acc. Assgn Data Entry Required

Consumption Acc. Cost Centre Asset




Types of Procurement Procurement for Stock vs. Consumption Procurement for Stock



Material Number is Required



No Account Assignment Category



Posting to Stock Account



Inventory Quantity will be updated


Procurement for Consumption



Material Number can be used, but is not mandatory



Account Assignment Category mandatory



Posting to Consumption Account



Inventory Quantity will not be updated




Types of Procurement External vs. Internal Procurement

External Procurement Is the process of procuring goods or services from external vendors.

Internal Procurement Refers to trade happening between the different entities of the same organization.





Types of Procurement External vs. Internal Procurement (…Cntd) 

External Procurement There are 3 basic forms of external procurement generally supported by the Purchasing component of IT systems.  One-time purchase orders  Longer-term contracts with the subsequent issue of release orders  Longer-term scheduling agreements and delivery schedules






External Procurement One-Time Purchase Order You use one-time orders for materials or services that you order irregularly. You can reference a purchase requisition, RFQ, or another PO when creating a one-time order.

Contract and Release Orders For materials that are being ordered regularly and in large quantities, we can negotiate a deal with the vendor for pricing or conditions & record then in a contract. In a contract you also specify the validity date.

Scheduling Agreement If a material is ordered on a regular basis and is to be delivered according to an exact time schedule, then you set up a scheduling agreement. This method of procurement is typically used when Just-in-Time deliveries are required from the vendor (for example, in the automobile industry). | September 2011 | Overview workshop |





Internal Procurement Large corporate organizations may own multiple separate businesses or companies. Each of these companies maintains a complete bookkeeping system with separate Balance Sheets and Profit & Loss Statements and hence when trade occurs between them it needs to be recorded.

Key activities:  Creating a Purchase Order at the receiving Company  Creating delivery and billing documents at the issuing Company (This is an inter company billing document; Pricing takes place as normal)  Posting the goods receipt at the receiving Company (The material stock increases and an accounting document gets created)  Posting the invoice receipt at the receiving Company (The invoice is checked with reference to the purchase order)






Internal Procurement Sometimes companies also need to record and monitor stock movements between its own entities e.g. production facilities.

Key activities:  Creating a stock transport order in the receiving entity  Generating a delivery document in the delivering entity  Picking the material in the delivering entity  Posting an issuing document in delivering entity  Posting a receipt document in receiving entity




The SAP Requisition to Pay process Is the process that includes from the requisition determination until the payment of the correspondent invoice. It is comprised by the following SAP documents:

Module impacted

Req. Determ.

PP

Purchase Requisition

Purchase Order

Goods Receipt


Payment

Material Management (MM) Accounts Payable (AP) General Ledger (GL) Project System (PS)




The SAP Requisition to Pay process Is the process which helps users determine the material/services requirements. Requirements can be based on customer demand, which drives the production planning process, or requests from within the organization.

Module impacted

Req. Determ.

PP


Purchase Order

Goods Receipt


Payment





The SAP Requisition to Pay process A Purchase Requisition is a request to Purchasing to procure a certain quantity of a material or a service so that it is available at a certain point in time. It is not essential for creating a PO. It can also be created automatically by running the MRP in the PP module.

Module impacted

Req. Determ.

PP


Purchase Order

Goods Receipt


Payment





The SAP Requisition to Pay process A Purchase Order is a formal request to a vendor to supply or provide goods or services at a certain point in time with a certain quantity, under the agreed terms and conditions.

Module impacted

Req. Determ.

PP


Purchase Order

Goods Receipt


Payment





The SAP Requisition to Pay process Goods Receipt is the term used to describe an increase in warehouse stock due to receipt of goods from external vendors of from internal stock transfers.

Module impacted

Req. Determ.

PP


Purchase Order

Goods Receipt


Payment





The SAP Requisition to Pay process Is the verification of the data on the invoice sent by the vendor against the goods receipt and the original purchase order. This ensures that the goods received match the cost and quantity requirements of the purchase order and the vendor’s invoice.

Module impacted

Req. Determ.

PP


Purchase Order

Goods Receipt


Payment





The SAP Requisition to Pay process Once the invoice is posted, the payment is made on the basis of the payment terms and conditions defined in the purchase order. It is processed through Accounts Payable in the FI module.

Module impacted

Req. Determ.

PP


Purchase Order

Goods Receipt


Payment





Introduction to SAP  SAP stands for “Systems, Applications and Products in data processing".  SAP is the worlds third-largest independent software provider.  SAP was founded by 5 former IBM employees in 1972 and head quartered in Walldorf, Germany.  SAP is the global market leader in ERP and in collaborative & interenterprise business solutions




Introduction to IMG 

SAP Implementation Guide When a client purchases the SAP, it comes in a CD very similar to any software that we buy off the shelf. When SAP is first installed, SAP comes with some standard set up. Example of those set up are company code 0001, plant 0001 etc. These setup do not necessary meet the client requirement. In the build phase of a project, SAP system is customized according to the requirement of the client which are identified in the design phase. In SAP, customizing is performed through the Implementation Guide (IMG). Note that customizing is different from master data or transactional data.




Introduction to IMG 

SAP Configuration – Implementation Guide (SPRO)




SAP Enterprise Structure 

Organizational levels in a procurement cycle Client Company Code Plant

Storage Location Pur Org

Pur Groups





Client An independent unit in R/3 system that contains its own set of master data and table contents It is not a legal entity but is more technical in nature



Company Code 

An Independent accounting unit within the client.



Each has its own P&L account and Balance Sheet



Setup is done by the Finance team





Company Code (…Cntd) 

Company Code setup in SPRO:



Financial Accounting -> Financial Accounting Global Settings -> Company Code -> Enter Global Parameters (OBY6)



Financial Accounting -> Financial Accounting Global Settings -> Fiscal Year -> Maintain Fiscal Year Variant (OB29)



Financial Accounting -> Financial Accounting Global Settings -> Fiscal Year -> Assign Company Code to a Fiscal Year Variant (OB37)





Plant 

A unit under the company



All operation within the company take place here (e.g. Manufacturing, Sales, Storage Unit, Administration Building)



It is usually mapped to a physical location even though “virtual” ones can also exist



Plant setup in SPRO: Enterprise

Structure -> Definition -> Define, copy, delete, check plant (SPRO)

Enterprise

Structure -> Assignment -> Logistics – General -> Assign plant to company code (OX18)





Storage Location 

The storage location is an organizational unit that allows the differentiation of material stocks within a plant.



Physical Inventory is carried out at storage location level.



Storage location codes can be repeated under a different plant



Storage Location setup in SPRO: Enterprise

Structure -> Definition -> Materials Management -> Maintain Storage Location (OX09)





Purchasing Organization 

Responsible organizational unit for procuring materials / services



Procures the material / service for one or more plants within the company



Purchasing Organization setup in SPRO: Enterprise

Structure -> Definition -> Materials Management -> Maintain purchasing organisation

(OX08) Enterprise Structure -> Assignment -> Materials Management Assign purchasing organization to company code (OX01) (optional) Assign purchasing organization to plant (OX17)





Different forms of purchasing 



Centralized purchasing (corporate-wide purchasing) 

Purchasing org is not assigned to any company code.



Any plant can purchase through this one purchasing org.

Company-specific purchasing





A purchasing org is assigned to a company code.



Any plant from that company can purchase through this one purchasing org.

Plant-specific purchasing 

A purchasing org is assigned to a plant (and not to company code)



One specific plant can purchase through this one specific purchasing org.





Purchasing Groups 

The groups which are responsible for day to day buying in the purchasing organization



Purchasing Group setup in SPRO:

Materials

Management -> Purchasing -> Create Purchasing Groups (OME4)




SAP Enterprise Structure CLIENT COMPANY PLANT

ASPL ASPL

BDC BDC

BDC1 BDC1

Bay11 Bay11

PURA PURA

Bay21 Bay21

PURCHASE ORGANIZATION

MDC MDC

BDC2 BDC2

Bay12 Bay12

STORAGE LOCATION

Bay22 Bay22

PURB PURB


REF PURCHASE ORGANIZATION

MDC1 MDC1

Bay31 Bay31

MDC2 MDC2

Bay32 Bay32

Bay41 Bay41

Bay42 Bay42

PURM PURM




Configuration

Define here

Assign here





Configuration Defining Organizational Elements Client : SPRO > IMG > Enterprise Structure > Definition > Financial Accounting > Define Company > New Entries

Company Code : SPRO > IMG > Enterprise Structure > Definition > Financial Accounting > Edit, Copy, Delete, Check Company Code > Copy, Delete, Check Company Code

Controlling Area : SPRO > IMG > Enterprise Structure > Definition > Controlling > Maintain Controlling Area > Maintain Controlling Area





Configuration Defining Organizational Elements(…Cntd) Plant : SPRO > IMG > Enterprise Structure > Definition > Logistics General > Define , copy, delete , check plant > copy, delete , check plant

Storage Location : SPRO > IMG > Enterprise Structure > Definition > Materials Management > Maintain Storage Loc ( w.r.t plant ) > New Entries

Purchase Organization : SPRO > IMG > Enterprise Structure > Definition > Materials Management > Maintain Pur. Org >New Entries.





Assigning  SPRO > IMG > Enterprise Structure > Assignment > Financial Accounting > Assign Company Code to Company  SPRO > IMG > Enterprise Structure > Assignment > Controlling> Assign Company Code to Controlling area  SPRO > IMG > Enterprise Structure > Assignment > logistics General > Assign Plant to Company Code  SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > Assign P.Org to Co . Code  SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > Assign P.Org to Plant  SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > Assign Standard P.Org to Plant  SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > Assign P.Org to Reference P.Org





Activate Company Code for Materials Management  SPRO > IMG > Logistics General > Material Master > Basic Settings >Maintain Co.Code for Materials Mgmt




SAP Enterprise Structure  Exercise 1.0 • • • • • •

Configuration: Display a Company Code Configuration: Display a Plant Configuration: Display a Storage Location Configuration: Display a Purchasing Organization Configuration: Display an Assignment of Plant to Company Code Configuration: Display an Assignment of Purchasing Organization to Company Code • Configuration: Display an Assignment of Plant to Purchasing Organization Organization




SAP Master Data Overview SAP R/3 operates “real time”, placing the responsibility of data integrity on all users. 

Information in SAP is always current  No time lag between data entry and data availability



Reports and data displays available online  Reports can be run in foreground or background



Everyone has a critical role to play in maintaining “data integrity”




SAP Master Data Overview SAP R/3 operates using “real time” data that can be categorised as master or transactional data. 

Master Data Basic informational data created centrally and used in nearly all applications  For example, a Vendor is data that is used in creating contracts, purchase orders, and payments  Remains constant over time, although some master data may need to be updated 



Transactional Data Data associated with the processing of a business transaction  Specific for each transaction 




SAP Master Data Overview 

Types of Master Data in SAP 



Vendor Master Data 

Unique repository of all the relevant information from the vendors.



It’s divided in three categories or views: 

General data: contains mostly the legal information from the vendor, for example address, legal name, ABN number, etc.



Company Code data: contains all the information related to a specific company code. For example: account information, etc.



Purchasing data: this is maintained for each purchasing Organization. For example the currency, incoterms, etc.

Purchasing Info Record 

This is vendor-specific data on a certain material. For example, delivery time and purchase price.




SAP Master Data Overview 

Types of Master Data in SAP (…Cntd) 

Material Master Data It is an enterprise’s main source of material-specific data. It is used in all areas of logistics in the SAP R/3 system.  Since different user departments within an enterprise work with one material, and each department enters different information relating to it, the data in a material master record is subdivided according to area of use. Each user department thus has its own view of a material master record.  The data screens used to process material master records can be subdivided into the following types:  Main data: these are the views for the individual user departments, such as basic data, materials planning, accounting, sales, purchasing, and so on.  Additional data: these are the views on which you find additional information such as alternative units of measure, material short descriptions, and consumption values. Purchasing data: this is maintained for each purchasing organization. For example the currency, incoterms, etc. 




SAP Master Data Overview When you create a purchasing document, SAP R/3 supports you with the data entry by providing you with the default values taken from existing master records. PO Header Vendor X Items 10 Material A 20 Material B 30 …

Material Master Data

Vendor Master Data Purchasing Info Record




Material Master

 What is Material Master ?  How is the Material master used in all the departments ?  How is it useful in creating Purchase Orders?




Material Master

 Introduction The material master record contains the information on all the materials that a company procures or produces, stores or sells. The material master record is a company’s main source of material specific data. It is used by all components in the R/3 logistics system. Basic data

Purchasing

Materials planning

S&D

Stocks in Plant/ stor Loc

Work scheduling

Accounting

Material Master Record

Quality management

Storage

Forecasting

Warehouse Mgmt

Classification




Material Master

 Introduction (…Contd) • Integration of all material data in a single database, prevents the problem of data redundancy. Data contained in material master records is required for many functions within the R/3 logistics system, for example: Purchasing data for ordering Inventory management data for posting a goods movements and managing physical inventory Accounting data for material valuation MRP data for material requirements planning

• Since the material master is used and maintained by different user departments, the material master is subdivided according to area of use, and thus each user department in a company has its own view of a material master record.




Material Master

 Introduction (…Cntd) • Some material views are valid for all organisational levels, while some are valid only for certain levels. Data at client level is data valid for the whole enterprise (e.g. material number, material group, unit of measure, …) Data at plant level is valid within a plant and all storage locations belonging to that plant (e.g. purchasing data, forecasting data, work scheduling data, …) Data at storage location level is only valid for a particular storage location (e.g. storage bin description, picking area, …)




Material Master

 Material Master Record: Screens When creating or editing a material master data, the user goes through a number of screens. • • • •

In the initial screen the user enters the material number, industry sector and material type. In the second screen the user specifies the user department views to be processed. The third screen prompts the user for organisational data. Material data is then entered in the data screens. Note: Screen sequence can be changed. Material (Industry sector) (Material type) User department views Basic Data Purchasing Accounting …

Organizational levels Plant Sloc …


Data screens



Material Master

 Initial Screen The Industry Sector and Material Type fields on the initial screen are mainly control fields i.e. they control the screen sequence, views and fields in the data screens of the material master record. A number of different Industry Sectors and Material Types exist in standard SAP R/3, when companies need more they can define these in Customising according to their own requirements.

Material Types Industry Sectors




Material Master

 Initial Screen Material Type •

Materials with the same basic attributes are grouped together and assigned to a material type. This allows the organisation to manage different materials in a uniform manner in accordance with the company's requirements. Material Type

Control Function Number assignment

Raw materials

Procurement type Semi-finished products

Control

User departments Field selection

Finished products

Account determination ..............




Material Master

 Initial Screen •Material Type (…Cntd) Example: Control Function

Material Type A

Material Type B

Number assignment

Internal Number Assignment (i.e. System)

Internal or external number assignment (i.e. System or user)

Number Range Interval

1000000000 - 1100000000

2000000000 – 2100000000

Which screens are displayed and in which order

1. 2. 3. 4. 5. 6.

Procurement type

Produced in-house only

Basic Data 1 Basic Data 2 Purchasing Warehouse Management 1 Warehouse Management 2 …


1. 2. 3. 4. 5. 6.

Basic Data 1 Basic Data 2 Accounting 1 Accounting 2 Forecasting …

Can be produced in-house or procured externally



Material Master

 Initial Screen • Material Type (…Cntd) Along with the plant, the material type determines a material's inventory management requirement; that is, whether the system updates quantity changes in the material master record or updates changes in value in the stock accounts in Financial Accounting. The material type also determines which accounts are posted when a material is posted to stock or leaves the warehouse.




Material Master

 Initial Screen • Industry Sector Selection Screen Chemical Industry

Control

Field selection

Pharmaceutical Ind.

Like material type, the industry sector has a control function in SAP R/3 When you create a material master record, the industry sector defines: which screens are displayed and in which order which industry specific fields are displayed in each screen  In customizing , you can define new industry sectors and maintain field reference for field selection control according to your company- specific requirements.  The Industry sector assigned to a material cannot be changed later.




Material Master

 User Departments Views - Main Data • Basic Data • Classification • Accounting • Costing • Forecasting • Materials Requirement Planning (MRP) • Purchasing • Stocks, Plant and Storage Location • Sales • Production Resources/Tools • Quality Management • Storage • Work Scheduling




Material Master

 User Departments Views - Main Data (…Cntd) • Basic Data: On this data screen, the user enters data that is also used by other user departments • Classification: Classes allow companies to classify materials with the same characteristics. A material can be assigned to one or more classes. Classification data is valid for the whole company. • Accounting: Besides other accounting data, users normally enter data relevant to valuation in the current period here, and companies can manage accounting data on company code level or plant level. • Costing: Besides costing data, users can also define valuation data on this screen. This data is identical with that on the Accounting screen. In most cases, it will already exist on the Costing screen because it has already been entered on the Accounting screen. If it is entered on the Costing screen first, it will appear on the Accounting screen as default values that can be overwritten. Costing data is managed at plant level. | September 2011 | Overview workshop |



Material Master

 User Departments Views - Main Data (…Cntd) • Forecasting: On the Forecasting screen, users have the following options: Users can access the screens on which consumption values and forecast values are entered as a basis for the initial calculations. Users can directly execute an individual forecast for a material. Starting from the maintained forecast parameters, users can simulate the forecast in several dialog steps. The forecast values are updated only when the material master record is saved. The MRP parameters Reorder point and Safety stock, which are based on the forecast, are adjusted dynamically at the same time. Forecasting data is maintained on a plant level.

• Materials Requirement Planning (MRP): MRP is planned at plant level, however if users need to enter data specific to a storage location, they must also specify the storage location concerned. You must specify a storage location if you want a material to be included in storage location MRP. Storage locations are considered as independent units for MRP purposes.




Material Master

 User Departments Views - Main Data (…Cntd) • Purchasing: Not all purchasing data is plant-specific. As a result, the data displayed depends on whether the user enters a plant or not. • Stocks, Plant and Storage Location: After material master record has been created, users can select the following data screens in the Select View(s) dialog box for displaying the stocks held at a particular plant or storage location: Plant stock Storage location stock Other User Department Views: Sales Production Resources/Tools Quality Management Storage Work Scheduling




Material Master

 User Departments Views - Main Data Basic Data Important Fields: Material Description: Text containing up to 40 characters that describes the material in more detail.

Base Unit of Measure: Unit of measure in which stocks of the material are managed. You define the base unit of measure and also alternative units of measure and their conversion factors in the material master record.

Material Group: Key used to group together several materials or services with the same attributes, and to assign them to a particular material group.




Material Master

 User Departments Views - Main Data Accounting

Important Fields: Valuation Category Determines whether stocks of the material are valuated together or separately. Split valuation allows companies to valuate different stocks of the same material separately. In the case of split valuation, this indicator also determines which valuation types are allowed, that is, the criteria by which stocks can be valuated.

Split valuation allowed

Material A Valuation Category Quality Origin


Valuation Types High Quality Average Quality Low Quality

Stock x Price = Value 1UOM x $100 = $100 2UOM x $90 = $180 1UOM x $75 = $75



Material Master

 User Departments Views - Main Data Accounting (…Cntd) Important Fields:

Valuation Class

Material Type

Valuation Class

Valuation Class 1

•Valuation class is used to combine the Accounting 1 materials for assigning G/L accounts, so that Valuation class companies do not have to manage a separate stock account for each material. •The valuation class allowed for a material depends on the material type and can be configured in customizing.

Price Control

300000

Valuation Class 2 300100

Material Master

Price Control Material valuation

Indicates the price control used to valuate the stock of a material. The following options exist: •Standard price •Moving average price

Price control ( In material master ) “S“ Standard price

“V“ Moving average Price

Valuation will be revisited in more detail on Day 4 of the boot camp.




Material Master

 User Departments Views - Main Data Purchasing

Important Fields: Batch Management Indicator specifies whether the material is managed in batches.

Automatic PO Indicator specifying whether purchase orders are generated automatically when requisitions are converted. Note: The indicator "Automatic POs allowed" must also be set in the master record of the vendor from whom the material is ordered.

Purchasing Value Key Key defining the reminder days and tolerance limits valid, as well as the shipping instructions and order acknowledgment requirement of the material for Purchasing.




Material Master

 User Departments Views - Main Data Purchasing (…Cntd)

Important Fields: Quota Arrangement Usage Is field controls how the total order quantity is calculated in the quota arrangement, and thus which source of supply is determined for the material at a particular point in time. (Quota Arrangement will be discussed in detail on day 3 of boot camp)

Source List Requirement Specifies whether the source list (List of available sources of supply for a material, indicating the periods during which procurement from such sources is possible) must have been maintained in the case of external procurement for a certain plant.




Material Master

 User Departments Views - Additional Data Data screen that can be accessed from any view in a material master record by choosing in the standard material master




Material Master

 User Departments Views - Additional Data (…Cntd) Additional data screens are: • Descriptions Companies can enter a description for a material master in different languages. However, only one description per language is allowed.

• Unit of Measure Multiple units of measures can be entered for a material master, however a base unit of measure has to be specified (stockkeeping unit )and a conversion factor to that unit of measure must also be specified. Base Unit of Measure = Piece 4

Order UOM = Box


12

Sales UOM = Carton



Material Master

 User Departments Views - Additional Data (…Cntd) • Additional EANs An International Article Number (EAN) (or Universal Product Code (UPC) in the USA) is an internationally standardized number uniquely identifying a material. It always refers to a specific unit of measure or type of packaging such as a pack of ten pieces or a box. For each unit of measure defined in a material master record, you can assign one or more EANs and specify packaging data (such as dimensions, volume, and gross weight).

• Document Management A material may have various documents such as drawings and photographs assigned to it. The system differentiates between these documents by means of the document type. If the company uses SAP’s document management system, you can manage documents and assign existing documents to a material in the material master record. Document data is managed at client level.




Material Master

 User Departments Views - Additional Data (…Cntd) • Basic Data Texts, Inspection Texts, Internal Comments Text are stored at client level, and can be entered in many languages though only one text is allowed per language.

Basic data text This text can be used as per company’s requirement, for example, to store additional, general information on the material. Inspection text This text can be used to stipulate rules on the procedure to be followed for inspecting a material, or any special points to be observed. Internal comment This text can be used as per company’s requirement, for example, to store any specific points to be taken into consideration with regard to the material.




Material Master

 Extending Material Master Record If one user department has already stored data on a material in a material master record, and another user department wants to enter data on the same material, there is no need to create another material master record. Instead, the material master record is extended to include the information relevant to the user department. A material master record is also extended if the same user department wants it to include data for other organizational levels. Extend to different Extend Views Org. levels

e.g. Accounting

e.g. Plant 1200

Extend with

Material A Material A Purchasing

Purchasing Plant 1000 Accounting

Plant 1000

Plant 1000

Material A Purchasing Accounting Plant 1000 Plant 1000 Purchasing Plant 1200 Accounting Plant 1200




Material Master



System Walkthrough • Transaction : Create a material master




Material Master  Initial Screen




Material Master  Selective views for creating Material Master




Material Master  Maintain data in Basic data1 view




Material Master  Maintain data in Purchasing view




Material Master  Maintain data in Accounting 1 view




Material Master Customizing Settings for Material Master Introduction • What is customizing settings for material master? • How is it useful for end users? • How does it satisfy the business requirement of an organisation?




Material Master Customizing Settings for Material Master Concept • Customizing settings for material master, we can customize fields fields according to the business requirements. Most cases standard SAP providing is enough, enough, but some case you need to customize( i.e. your own industry sector, material material type, no ranges, … ). • We can restrict the material number length max 18 characters • When ever you are creating a Material , if u select you select your your own material type and industry sector, it will display the selective views required required views for our material( i.e., what we have customized )




Material Master 

System Walkthrough • • • • • • •

Configuration: Create a purchasing value key Configuration: Create a purchasing group Configuration: Define material number length Configuration: Create an industry sector Configuration: Create a material type Configuration: Maintain number ranges Configuration: Define screen sequence




Material Master  Create Purchasing value key




Material Master  Create Purchasing group




Material Master  Material number length – Material

Demo1_Cutomizing settings for Material Master




Material Master  Create an Industry Sector




Material Master  Create a Material Type




Material Master  Maintain Number Ranges




Material Master  Copy the standard screen sequence to own




Material Master  Assign the screen sequences to material type and industry sector




Material Master  Important T – Codes in Material Master • MM01 Create Material Master • MM02 Change Material Master • MM03 Display Material Master • MM17 Mass Maintenance • MMAM Change Material Type • MM11 Schedule creation of Material Master • MM50 Extend the material view(s) Once material masters are created from one plant same can be extended extended to other plants using TCode MM01.




Material Master  Exercise 2.0 Note that the exercises are divided into configuration and transaction/master transaction/master data related. Each exercise are identified as such on the left side of of the “colon” colon”. • • • •

Configuration: Create purchasing group Configuration: Create Material Type Configuration: Maintain number ranges Transaction: Create material master




Vendor Master

 What is meant by vendor master ?  How is it useful in purchasing?  How is the vendor master record maintained?




Vendor Master  Introduction The Vendor Master Record contains information like vendor’s name, address on all the organisation’s vendors. Data in the vendor master Client record is divided into three categories: • General data General data is data valid at client level and hence available throughout the organisation. e.g. Vendor address, bank details, …

• Accounting data

Ge

Purchasing data is maintained at the purchasing organisation level. e.g. Purchase order currency, Incoterms, …


Dat a

Company Code

Accounting data is maintained at company code level and is valid for all the plants belonging to the company code. e.g. Reconciliation account, Payment methods, …

• Purchasing data

ner al

Accounting Data

Pur. Org. a rch u P

gD sin

Vendor Master Record

ata



Vendor Master  Creating a Vendor Master record Initial Screen

When creating a vendor master record, you must specify an account account group. The account group has control function in SAP R/3. The Account Group controls: • The type of number assignment. • The number range • Whether or not a one time vendor is involved. • Which fields are displayed on the respective screens and whether entry in these fields is mandatory or optional.




Vendor Master  Creating a Vendor Master record (…Cntd) Initial Screen

Although the account group is the only mandatory field on this screen, screen, the Company code and Purch. Organisation fields will determine the screens screens that the user will be able to access i.e. at which organisational level the the vendor master record is being created. Account Group

Acct. Group & CoCode


Acct. Group & CoCode & Pur. Org



Vendor Master  General Data General Data in a Vendor Master record is divided into 3 sub categories: categories:




Vendor Master  Accounting Data Accounting Data in a Vendor Master record is divided into 4 sub categories and is usually maintained by the accounting department :




Vendor Master  Purchasing Organisation Data Purchasing Data Purchasing Data in a Vendor Master record is divided into 2 sub categories:

•Terms of Payment: Defines cash discounts and payment periods. •Incoterms: Specify certain internationally recognised procedures that the shipper and the receiving party must follow to complete a shipping transaction.

The purchasing organisation salesperson and contact number at vendor office.




Vendor Master  Purchasing Organisation Data Purchasing Data (…Cntd) •Auto PO: Indicator specifying whether purchase orders are generated automatically when requisitions are converted. •Acknowledgment reqd: Determines whether the purchasing document is to be acknowledged by the vendor. •ABC Indicator: Serves to assign the vendor to one of the categories A, B or C, according to relevance to organisation.

•Purchasing Group: The purchasing group is internally responsible for the procurement of a material/service and as a rule the principal channel for a company's dealings with its vendors. A purchasing group can be an individual or a group of individuals. • Planned deliv. time: Number of calendar days needed to obtain the material or service from the vendor.




Vendor Master  Purchasing Organisation Data Partner Function A vendor can take up different roles depending upon the requirement. requirement. these roles are called Partner roles or Partner Function. Some of these roles are given below: • Ordering address • Supplier of goods • Invoice present by • Alternative Payee




Vendor Master  System Walkthrough • Configuration: Define Account group • Configuration: Define Number Ranges • Configuration: Assign number ranges to account group • Configuration: Define the term of payment • Configuration: Define the Partner function • Configuration: Define the Partner schemas • Transaction: Create vendor master • Transaction: Change vendor master • Transaction: Display vendor master




Vendor Master  Create an account group
















Vendor Master  Define number ranges




Vendor Master  Assign vendor Account group to number ranges.




Vendor Master  Define Terms of Payment




Vendor Master  Define Partner Function.




Vendor Master  Define partner schema




Vendor Master  Define Partner Function in schema.




Vendor Master  Create a New Vendor Master.




Vendor Master  Change a Vendor Master.




Vendor Master  Display a Vendor Master.




Vendor Master

 Exercise 3.0 • • • •

Configuration: Create vendor account group Configuration: Maintain number ranges Configuration: Assign account group to number ranges Transaction: Create vendor master




Info Record / Source Lists  Source Lists • What is meant by source list? • How is this master record maintained?




Info Record / Source Lists  Source

Lists Introduction

• Source list specifies the possible sources of supply for a material over a given period of time. It shows the time period in which a material may be ordered from a given vendor or under a certain long-term purchase agreement. • Source list is used in the administration of sources of supply. • Source list can be created manually or generated automatically. • Source list you can be copied from one plant to another plant




Info Record / Source Lists 

System Walkthrough

First walkthrough will be on source list. • Configuration: Source list requirement at plant level • Transaction: Material master settings for source list • Transaction: Maintain a source list




Info Record / Source Lists  Source list requirement at plant level




Info Record / Source Lists  Material Master settings for Source List




Info Record / Source Lists  Maintain a source list – ME01




Info Record / Source Lists  Info Records • What is meant by info record? • How is this master record maintained? • How is it useful in purchasing?




Info Record / Source Lists  Info Records Introduction • The purchasing info record (Info record) contains the information on a specific material and vendor supplying the material, For example, the vendor's current pricing is stored in the info record. • Info records can be created at purchasing org / plant level or Purchasing organization level. • When you create a purchase order, the system searches for info record for purchasing organization/plant combination. If there in no record for this combination, the system searches for purchasing organization only. • You can maintain info record manually or automatically from quotations, purchase orders or outline agreements (these purchasing documents will be discussed in detail on Day 3 of the boot camp)




Info Record / Source Lists  Info Records Introduction (…Cntd) Info record can be maintained for different procurement types • Standard A standard info record contains information for standard purchase orders. The info records can be created for materials and services with and without master records. • Subcontracting A subcontractor info record contains ordering information for subcontract orders. For example, if you subcontract the assembly of a component, the subcontractor info record would include the vendor's (subcontractor’s) price for assembling the component.




Info Record / Source Lists  Info Records Introduction (…Cntd) Info record can be maintained for different procurement types (…Cntd) • Pipeline A pipeline info record contains information on a vendor’s commodity that is supplied through a pipeline or pipes (for example, oil or water) or by similar means (for example, electricity through the mains). • Consignment A consignment info record contains information on a material that vendors keep available at their own cost on the orderer’s premises. The info record contains the vendor’s price for withdrawals by the orderer from consignment stock. As in the case of the pipeline info record, you can store prices for different validity periods.




Info Record / Source Lists  System Walkthrough

This walkthrough is on info records. • Transaction: Create Info record at Purchasing org / Plant level • Transaction: Create Info record at Purchasing org level only




Info Record / Source Lists  To create an Info record – Purchasing org / Plant level












Info Record / Source Lists  To create an Info record at Purchasing Organization level












Info Record / Source Lists  Info Update in quotation




Info Record / Source Lists  Info Update in PO




Info Record / Source Lists  Info Update in Contract (Outline agreement)



Day-1, SAP MM

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